Large digital companies operating in the European Union, such as Alphabet Inc. or Twitter Inc., could face a 3% tax on their gross revenues based on where their users are located, according to a draft proposal by European Commission.
The draft was circulated and outlines how a targeted levy on gross revenues would increase the tax bill digital giants face, as the bloc seeks to raise money from an industry it says provides less than it should to public coffers. EU countries have been looking into methods to tax digital companies, including Amazon. com Inc. and Facebook Inc., in a way that captures the true value created in the region. The commission’s planned revenue tax, which is expected to be proposed on March 21, would only represent a targeted, short-term solution.